Photograph by Justin Sullivan—Getty Images
By Lauren Silva Laughlin
September 29, 2014

Starboard Value has become the Yorkshire Terrier of activist investors.

The $2.6 billion fund typically invests in small cap companies, according to its website, and it has been a relatively successful activist in this realm. But it has recently made some hefty suggestions to Internet giant Yahoo (YHOO), recommending to CEO Marissa Mayer that the company consider a merger with AOL (AOL). But while Starboard can bark loudly, CEOs are not too scared of its bite.

That’s not to say Starboard has been an unsuccessful activist. Overall, it has posted a decent “conversion” record, meaning it has succeeded in getting companies to do what it has asked them to do. Since 2009 (when the fund was still part of the Ramius Group), Starboard has taken aim at 33 companies, according to records from Activist Insight. Of those, the company was successful on 13 campaigns. It was partially successful—meaning management adhered to some of its demands—at another 10 or so firms.

But about two-thirds of those targets were companies with market-caps of less than $2 billion. Larger campaigns have produced mixed results. Two years ago, Starboard criticized AOL’s ownership of Patch, its hyper-local news service. At the time, AOL ignored this gripe and Starboard lost a proxy battle when shareholders voted against a few directors the fund had nominated. Instead, AOL sold some patents and handed cash back to shareholders. Though Starboard reportedly made quite a lot of money on the investment, it wasn’t because AOL did what it was asked to do. (AOL did sell Patch in January 2014, and its share price is currently at about the same level as it was at that time.)

A campaign against TriQuint Semiconductor (market cap of $2.6 billion) ended positively for Starboard, but not because the firm’s management followed its instructions. Starboard wanted the company to streamline its business, including a sale of assets, and was seeking to replace six of the company’s eight board members. Instead, later, Starboard endorsed the company’s plan to merge with a rival.

Starboard—which did not return a call for this story—may have made money in both cases. And it could very well make money on its Yahoo efforts. But it may not necessarily come from Yahoo management following any of its suggestions.

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